Outlook not so rosy

Outlook for the Indian market does not look promising on Friday with US stocks falling for the first time in six days and Asian equities snapping a five-day rally.

Thursday, Standard & Poor's 500 Index lost 1.57, or 0.1 per cent, to 1,462.5, Dow Jones Industrial Average decreased 0.25 to 13,235.88 and Nasdaq Composite Index slipped 11.1, or 0.4 percent, to 2,541.70 after US’s largest mortgage lender Countrywide Financial said the economy is heading for a recession.

Asian stocks followed suit today on fears of a recession in its largest export market and as BHP Billiton and Posco led declines on concern demand for raw materials will cool.

Japan's Nikkei 225 Stock Average dropped 0.3 percent to 16,271.08, while the Kospi index declined 1.1 percent in South Korea.

Back home, the clash between Left parties and Congress has reached a flashpoint with CPM’s general secretary Prakash Karat saying the future of the Manmohan Singh regime is contingent upon the government’s willingness to put the Indo-US nuclear deal on hold.

Thursday too equities opened firm on global cues but closed in the negative given the political rumblings. Bombay Stock Exchange's Sensex closed 85 points or 0.59% lower at 14,163.98, after a high of 14,554.93.

The biggest index losers were Cipla (down 4.41%), ONGC (3.07%), State Bank of India (2.94%), Reliance Energy (2.63%) and ICICI Bank (2.47%). Banking stocks were worst hit, followed by realty. Cement and FMCG shares, however, managed to hold gains.

Nifty lost 38 points or 0.92% ending at 4114.95. The National Stock Exchange's index had touched a high of 4249.85 intra day.

STOCKS TO WATCH

Ambuja Cements is expected to advance as Holcim plans to buy a further 20% in the cement major at Rs 154 per share, taking its stake to about 56%. The Holcim group purchased 3.9% in Ambuja Cements for $220 million triggering the open offer. The price is at 20% premium to the average of Ambuja's share price over the past two weeks.

Cairn India is likely to surge since the government has approved the company's proposal to lay a pipeline from Barmer in Rajasthan to Gujarat coast. The project is estimated to cost $700 million and will take a minimum of 18 months to complete the project.